Whats considered an Illegal Lottery?

i was just thinking about entering a lottery type incentive niche but was just wondering what is considered an illegal lottery?

I'm looking for an answer through a US jurisdiction..

I don't plan on collecting any money for tickets or anything.. thats obviously illegal..

however, i was thinking more in the lines of getting them to do a task for me such as a offer or sign up for my optin list, etc etc
and after they do that they'd be entered into a draw for cash or goodies.. sorta like an incentive site i guess.

Is that considered as an illegal lottery?

Anyone have info about this? been looking everywhere and can't seem to find what i need.

Any help appreciated.

Siek

I was recently going to do a FB app based on a "lottery" type like this, but backed off. My personal opinion (nothing more) is to base it on a points system type deal. They do this they get 'x' points. They sign up they get 'x' points. Have a drawing for each point group, say 10,000 points - 20,000 points for one small prize and a larger drawing for the big dawgs with alot of points for a larger prize. Obviously, the ones who do the offers have the most points, leading to good ROI for you and a semi-fair chance for the client side.

Got a good network for incent. polls and what not. If you need, let me know.

This is very good question I know that there are very fine lines of whats considered an illegal lottery and a legal contest.

A lot of this depends on where you are and what it is that you are giving away. I worked for a company that ran a lot of contests and everything had to be run through lawyers...even for the simple contests you are talking about. 99% of the time you have absolutely nothing to worry about. The problems occur when some nutjob contacts you saying that they are contacting a district attorney etc for some reason. In Canada, everyone leaves Quebec out of their contests because Lotto Quebec requires you to pay them a fee to allow their residents to take part in the contest legally.

One thing you might want to do is just say that there is a random giveaway to members of the site...membership is free and instant. Find a terms and conditions from another site and substitute your info if need be.

so a random cash give away would be ok?

Lol I am not a lawyer but I think that it would be ok...especially since it is just on your website and you are not asking for anything in return for the prize except membership. But just as a guideline to anyone thinking of running this sort of thing, you should really have a terms and conditions and include the following types of things in it:

1. Describe how to play (terms & conditions...must receive mailings to be eligible, remain a member etc)
2. When the contest begins and ends
3. How the winner is picked and notified...how long they have to respond
4. How the winner will be paid, what they have to do to receive the prize etc
5. Eligibility - age, location, country etc
6. Include anything that gets you out of it like you can cancel any time, if the site goes down, hacking, right to change the rules etc (cover your ass however you can)
7. Include anything you want from them (right to use their name, picture etc)
8. If you know your state laws, say that any disputes etc will be handled in your state under your laws.

soo if i setup a site and say. "register today, we will be randomly selecting one of our members to win a $250 gift card" this setup should be ok?

Should be. Just have a link to the t's & c's from there.

Thinking ahead though, if this is something that you think you might want to duplicate across many sites. You can have a central site that gives away the prize and "manages" the memberships. This way, you can give away one $250 gift card to members of 50 different sites that you own. Then you post the winner across the 50 sites and nobody knows the difference. That way you offer what appears to be $12,500 in prizes when you actually only give out $250. Just change the graphics on the popup or signup form to match the site. Contests/giveaways/sweepstakes are all about the t's & c's. Lock those up tight and you can generate a lot of leads at a very low cost.

Here is an official definition (it's a PDF file) of the difference between a lottery and a sweepstake and similar. It is for the UK but the main points are pretty much the same in the US, too. It provides pretty good guidelines, not just quoting laws. Hope it helps the guys interested in the lottery field.

tinyurl[.]com/75rqmoj